Book release pits Amazon against local bookstores

The stampede to get the latest "Harry Potter" book is opening a window into the ongoing battle between Amazon.com and independent bookstores.

3 January 200211:43 am AEDT

The stampede to get the latest "Harry Potter" book has opened a
window into the ongoing battle between Amazon.com and independent bookstores
across the country.

Amazon announced today that it is teaming up with Federal Express to
deliver 250,000 copies of the children's book to customers on July 8, the
day it is released. Meanwhile, independent bookstores across the country are
offering same-day delivery, special parties and early openings to "Harry
Potter" customers.

"A lot of independent stores are doing a lot of different promotions for the
book with all kinds of quirky, peculiar wiggles as only independent
bookstores can do," said Richard Howorth, former president of the American
Booksellers Association (ABA). "We're trying to beat the big guys with
service."

The hoopla over the fourth "Harry Potter" book follows the international
success of the first three in the series. Customers have pre-ordered
thousands of copies of the book at Amazon and other bookstores, and it is
expected to be one of the biggest sellers among children's books this year.
Stores say they hope the book will not only draw in return customers but
bring in new shoppers as well.

The book is just the latest battleground between the independents, Amazon
and bookstore chains:

 Early last year, Amazon came
under heavy criticism from
independent bookstores after the e-commerce giant disclosed that publishers
were paying it up to $10,000 to feature their books on its site. Amazon
later said it would disclose
which title placements were paid for.

 Last fall, the ABA announced plans to launch an online
bookstore that would link to local independent book merchants. After several
delays, the store is now expected to debut later this summer.

 In December, the ABA
announced that it joined the
e-Fairness coalition, a group of offline merchants that is pressing the
federal and state governments to require e-tailers to charge sales tax on
all transactions. Typically, e-tailers only charge sales tax to customers
who reside in a state where the e-tailers have an office or other physical
presence.

What the independents are battling is Amazon's growing stake in the book
market. The company said its book business was profitable in the fourth quarter
last year on $317 million in revenue.

Meanwhile, analysts expect the online book market to continue to skyrocket.
Jupiter Communications, for instance, projects that online book sales will
grow from $1.2 billion this year to $3.3 billion in 2004.

In the face of these daunting figures, independent stores have seized on
"Harry Potter" as a way to combat Amazon and the other large online and
offline bookstores.

Corte Madera, Calif.-based Book Passage, for instance, is offering free
same-day delivery of the new "Harry Potter" book beginning at 7 a.m. on
July 8. Howorth, who owns Square Books in Oxford, Miss., said his store will
open at 6 a.m. that day and will give discounts to anyone who shows up in
pajamas.

Cody's Books in Berkeley, Calif., allowed pre-ordering for the first time
and will also offer same-day delivery service.

"We're trying to be as competitive as we can be," said store owner Andy
Ross.

That competition from independent booksellers and other bookstores played a
role in Amazon's announcement today that it would deliver the new "Harry
Potter" book to customers via FedEx on July 8 for the standard, non-express
shipping price.

Lyn Blake, general manager of Amazon's bookstore, said the company did not
want its customers to have to go through the "inconvenience" of going to a
physical bookstore.

"We wanted to get the books into customers' hands as soon as possible
without them having to go to midnight madness rushes and worry about whether
the store has enough copies to go around," Blake said.

Cody's Books and the other independent bookstores may have a long way to go
to catch up with Amazon. While the Seattle-based online giant has already
received some 170,000 pre-orders of the new "Harry Potter" book, pre-orders at
the independents have been far more modest.

Cody's Books, for instance, has had about 475 pre-ordered copies of the
book, while Book Passage customers have pre-ordered about 1,000 copies.

"An online retailer doesn't have the personal touch," said Robert Dry,
director of operations at Book Passage. "A computer, as good as it is, can't
answer questions."

The magic of Amazon's online book sales caused a commotion in the book
industry with the last "Harry Potter" book. In a move that upset the book's
U.S. distributors and offline bookstores, Amazon allowed its U.S. customers
to order the British version of "Harry Potter and the Prisoner of Azkaban"
through its United Kingdom-based subsidiary months before the book was
released in the United States.

All English-language versions of the upcoming "Harry Potter" book will be
released on the same day.